Coupon – definition and meaning

The word coupon has several different meanings, depending on the context. It can mean a voucher, ticket, or document that we redeem for a rebate or discount when buying something. It may be the yearly interest that a bond pays. A coupon might also be a form in a magazine, newspaper, or advertisement that we fill in. We then cut it out and send for a purchase, free sample, or application for something.

In metallurgy, the term refers to a metal or metalwork sample that we submit to a testing agency. We might also send the free sample to a customer.

Etymology of coupon

According to the Etymology Online Dictionary, the term first appeared in the English language meaning a ‘certificate of interest due on a bond’ in 1822. It was a certificate which the owner could cut from the bond and present for payment.

The word came from French Coupon, which means ‘a piece cut off.’ Couper in French means ‘to cut,’ while Coup means a ‘blow.’ In the 1860s, British travel agent Thomas Cook started using the term for a ‘discount ticket.’

It was not until 1906 that its meaning also widened to include forms or adverts that people filled in.

The word ‘coupon’ can have many meanings. This image shows five of them.

Coupon on a bond

A coupon payment on a bond is a quarterly, half-yearly, or annual interest payment. Bondholders receive the payments during bond’s life. In other words, from when they bought it until it matures.

Historically, bond issuers issued them in the form of bearer certificates. In a bearer certificate, there was no owner’s name. However, whoever was in possession of it is legally the owner. In fact, to confirm proof of ownership, all you had to do was present the document.

The issuer attached several coupons to the certificate , one for each payment.

On each one’s due date, the owner would tear it off and present it for payment. The act of tearing it off was known as ‘clipping the coupon.’

Love coupon

We use love coupons to tell people we love them. They are a form of voluntary IOU or promissory note between individuals who are in love.

These coupons contain a promise from one of the partners in a relationship. They promise to engage in a romantic activity at a specific future time.

Love coupons typically have a relevant artistic drawing or image and a love-promise to perform a romantic or intimate act. They may also contain redeeming conditions such as a date of expiration.

The Dating Divas says that purchasing gifts for a spouse can be one of the most difficult tasks out there. It suggests that DIY love coupons – which you can use to create messages and treats of your own – could be a great gift idea. (Image: thedatingdivas.com)

Apart from serving as a love note, people also use them as a very specialized form of greeting card.

The love coupon may have a romantic-event value, such as a full body massage or a romantic afternoon picnic. Some contain an afternoon at a spa, a candlelight dinner, or other more intimate and sensual treats.

Test coupon

A test coupon is a printed circuit board we use when testing the quality of a PWB fabrication process. PWB stands for printed wiring board. They are fabricated on the same panel as PWBs, usually at the edges.

People must make sure that the layers align properly. They must also ensure that all the circuits connect correctly.

Video – What is a coupon?

This Investopedia video explains what a coupon is. Specifically, when it refers to the interest rate on a bond. They used to be rectangles of paper attached to bonds that the owner would tear off, present each one at a specified date, and get paid.

No part of this website or any of its contents may be reproduced, copied, or modified, without prior consent, unless otherwise indicated for stand-alone materials.